Where Are Supplement Companies Going Wrong?
In a world where money talks, the supplement industry is no different. People want to use products that work, and retailers want to buy products that will increase their sales. There is, however, a fine line that many supplement companies walk on in terms of growth strategies. One of which, is trying to move into mass market in hope of moving volume. Some will say it’s smart, others will say it’s a sure way to lose business. Let’s explain.
The Market
The supplement industry is a niche market. We have distributors who generally sell only to retailers within the space such as gyms, health clubs, supplement stores, nutrition stores, smoothie bars, and the similar. When supplement companies starts moving outside of what we call the “health and fitness” specialty space, they start getting away from their core values. I’ve seen this personally with a very large company I worked for in the past. I was with this company for just about ten years and I saw a major shift from health and fitness to mass market simply because they want to move more volume—and it’s their choice and right to do so.
What people don’t understand is that many supplement companies starts in those grassroots mom and pop brick and mortar stores. They create the demand for the product when pushing it in their location. The more margin a retailer can make off your products, the more they are going to be willing to push it. On the flip side, retailers especially like when a brand is out there marketing and promoting their products so that when a customer walks through the doors, they already know what they want and it’s a quick sale.
Greed
Where things start to go sideways is when a supplement company starts to get greedy. They want to grow quickly so they drop their pants along with their pricing and go mass market. They cut their prices so low that most of the time these mass market locations are selling product at the same price that the supplement stores and gyms are buying it for. So what does this create? Turmoil.
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